New $8 million float Valhalla Uranium Ltd is the latest to seize the glamorous, almost golden, uranium baton and head off into the blue sky.
New $8 million float Valhalla Uranium Ltd is the latest to seize the glamorous, almost golden, uranium baton and head off into the blue sky.
In scenes reminiscent of past gold booms, the year has been characterised by the stock market successes, stumbles and falls of a raft of new uranium exploration floats and existing companies that have decided to top up with some uranium pasture.
Perth-based Valhalla — a spin off from WA gold producer Resolute Mining Ltd, which retained 83.3 percent — saw its 40c shares hit 63.5c this week, before easing back to 55.5c, taking the explorer’s market capitalisation from $48 million to $66.6 million.
Valhalla has a half stake in its namesake project at Mt Isa in Queensland, tenements which operator and 50 per cent partner Summit Resources Ltd has said contained over 75 million pounds of uranium oxide resources, making it “the most advanced uranium exploration resource in Australia. Only BHP Billiton at Olympic Dam and Rio Tinto subsidiary ERA at Jabiluka in the Northern Territory, control larger uranium resources.”
Summit and Resolute shares failed to join the Valhalla ride; Summit’s price having drifted from 90c at the end of September to 56c and Resolute’s from $1.55 to $1.14 in the same period.
The run on uranium hopefuls is based on some pretty good fundamentals, but the reality of another uranium mine getting up and running in Australia in the next 10 or more years is remote.
There are three operating uranium mines in Australia – Ranger (5,140 tonnes of uranium oxide a year) in the NT and Olympic Dam (4,370t/year) and Beverley (1,084t/year), both in South Australia. A fourth, Honeymoon in South Australia, has been cleared for construction, but put on indefinite hold until economic conditions improve.
There is little doubt that uranium power as a viable, non-greenhouse gas energy source, is gaining worldwide credence. The supply situation is expected to remain tight and prices have jumped from $US10 a pound to around $US35/lb in two years.
The counters to this otherwise rosy uranium mining scenario include the ability of existing major producers, in Australia and overseas, to increase production. BHP Billiton is in the midst of just such an environmental assessment at Olympic Dam.
Add to that the 10 or more years it would take to convert a uranium discovery into a mine in a country where all the states and major territory are governed by the Australian Labor Party, with little likelihood of lifting its ban on the development of new uranium mines in the near future.
Despite all this, Perth-based pack leader Paladin Resources Ltd’s Namibian uranium project is expected to go into production in September next year, making it the first new supplier to enter the uranium industry since 1983. Its shares have slipped from $2.56 at the end of September to $1.80.
Worse has befallen Deep Yellow Ltd, into which Paladin sold a swag of tenements, a drilling assay discrepancy pushing its 20c price at September’s end, down to 8c.
Among other new listings, Contact Resources Ltd has more than doubled its share price to 40c since listing in September; Korab Resources Ltd, down from 38c at September’s end to 29c; Monax Mining Ltd, down from 36c to 20c in the same period; Energy Metals Ltd, down from $1.10 in mid October to 75c and Nova Energy Ltd, down from 55c in September to 50c.
